SEC Form 6-K filed by Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
São Paulo, S.P., 05429-900
Federative Republic of Brazil
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
in paper as permitted by Regulation S-T Rule 101(b)(1)__.
in paper as permitted by Regulation S-T Rule 101(b)(7)__.
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes ______ No ___X___
registrant in connection with Rule 12g3-2(b):
2024 Earnings Page 2 |
| Highlights |
Adjusted EBITDA totaled R$ 11,339 million in 2024 (+19% vs. R$ 9,541 million in 2023) with an adjusted EBITDA margin of 52% (vs. 48% in 2023). The main pillars for its growth were i) higher revenue from the tariff increase and growth in the number of new connections; ii) personnel, from the 2023 Voluntary Termination Plan (“VTP”); iii) fixed costs dilution from volume growth.
Reported EBITDA totaled R$ 18,187 million (+99% vs. R$ 9,137 million in 2023) driven by the aforementioned drivers plus the financial asset bifurcation recorded in 3Q24.
Reported Net Income reached R$ 9,580 million in 2024 (+172% vs. R$ 3,524 million in 2023). Excluding non-recurring effects, construction margin and the financial asset bifurcation, Adjusted Net Income was R$ 5,174 million in 2024 (+37% vs. R$ 3,790 million in 2023).
In 4Q24, Adjusted EBITDA was R$ 2,999 million (+4.1% vs. 4Q23), reaching an adjusted margin of 54% (vs. 53% in 4Q23). The Reported EBITDA for the same period totaled R$ 2,294 million (-22% vs. 4Q23), mainly due to the severance accrual for the 2024 Voluntary Termination Plan carried out in the quarter.
Reported Net Income was R$ 1,435 million in 4Q24 (+21.0% vs. 4Q23). Excluding non-recurring effects, Adjusted Net Income totaled R$ 1,900 million (+64% vs. 4Q23).
Financial Asset Bifurcation
In July 2024, the Company signed a new concession agreement with URAE-1 resulting in a single concession covering 371 cities and that expires in 2060. This contract provides greater legal assurances and grants an unconditional right to receive a cash indemnity at the end of the concession period. Given that, the Company went on to recognize a concession asset bifurcation accounting for the contractual right that assets which will not be fully amortized during the concession period will be indemnified. For further information, please refer to Note 16 of the 2024 Audited Financial Statements.
Transition
In 4Q24, the new management started a review of processes that resulted in impacts on the results reported in 2024, among which (i) reassessment of legal claims; (ii) roll-out of the Sabesp Gente program to attract new professionals, retain internal talents, and manage career transitions through a Voluntary Termination Plan; (iii) review of its IT infrastructure and processes; (iv) PMI consulting to deploy strategic actions for 2025 and 2026; (v) overhaul CAPEX contracts and definition of the CAPEX pipeline for the upcoming years, accelerating the hiring of suppliers for essential works to meet the contractual universalization targets.
2024 Earnings Page 3 |
| 1. | CONSOLIDATED INCOME STATEMENT |
R$ million
| 2024 | 2023 | Var. (R$) | % | 4Q24 | 4Q23 | Var. (R$) | % | ||
| Revenue from Operations | 23.895 | 21.513 | 2.381 | 11,1 | 6.229 | 5.873 | 356 | 6,1 | |
| FAUSP | (395) | - | (395) | - | (238) | - | (238) | - | |
| Financial Asset | 9.151 | - | 9.151 | - | 331 | - | 331 | - | |
| Sales Tax | (2.731) | (1.542) | (1.190) | 77,2 | (567) | (431) | (136) | 31,4 | |
| (=) | Net Sanitation Revenue | 29.920 | 19.972 | 9.948 | 49,8 | 5.755 | 5.441 | 314 | 5,8 |
| Construction revenues | 6.226 | 5.600 | 626 | 11,2 | 2.084 | 1.825 | 259 | 14,2 | |
| (=) | Net Revenue | 36.145 | 25.572 | 10.573 | 41,3 | 7.839 | 7.266 | 573 | 7,9 |
| Construction costs | (6.086) | (5.475) | (611) | 11,2 | (2.037) | (1.784) | (253) | 14,2 | |
| Operating Costs and expenses | (14.304) | (13.812) | (492) | 3,6 | (3.913) | (3.274) | (639) | 19,5 | |
| Other operating income/(expense), net | (280) | 28 | (308) | (1.104) | (125) | (43) | (81) | 188,4 | |
| Minority Interest | 35 | 32 | 3 | 9,0 | 10 | 9 | 0 | 4,5 | |
| (=) | EBIT | 15.510 | 6.346 | 9.164 | 144,4 | 1.774 | 2.174 | (400) | (18,4) |
| Net Financial result | (1.868) | (1.592) | (276) | 17,3 | (543) | (887) | 344 | (38,8) | |
| (=) | EBT | 13.643 | 4.754 | 8.889 | 187,0 | 1.231 | 1.287 | (56) | (4,3) |
| Income tax | (4.063) | (1.230) | (2.833) | 230,2 | 204 | (100) | 305 | (303,7) | |
| (=) | Net income | 9.580 | 3.524 | 6.056 | 171,9 | 1.435 | 1.186 | 249 | 21,0 |
| EPS (R$)* | 14,02 | 5,16 | 2,10 | 1,74 |
* Number of shares = 683,509,869
2024 Earnings Page 4 |
| 2. | Adjusted INCOME STATEMENT |
R$ million
| 2024 | Adjustments | 2024 Adjusted |
2023 Adjusted |
Var. (R$) | % | ||||
| Financial Asset | Construction | Non-Recurring | |||||||
| Revenue from Operations | 23.895 | - | - | - | 23.895 | 21.513 | 2.381 | 11,1 | |
| FAUSP | (395) | - | - | - | (395) | - | (395) | - | |
| Financial Asset | 9.151 | (9.151) | - | - | - | - | - | - | |
| Sales Tax | (2.731) | 846 | - | 111 | (1.774) | (1.542) | (232) | 15,1 | |
| (=) | Net Sanitation Revenue | 29.920 | (8.305) | - | 111 | 21.726 | 19.972 | 1.754 | 8,8 |
| Construction revenues | 6.226 | - | (6.226) | - | - | - | - | - | |
| (=) | Net Revenue | 36.145 | (8.305) | (6.226) | 111 | 21.726 | 19.972 | 1.754 | 8,8 |
| Construction costs | (6.086) | - | 6.086 | - | - | - | - | - | |
| Operating Costs and expenses | (14.304) | - | - | 1.289 | (13.015) | (13.282) | 267 | (2,0) | |
| Other operating income/(expense), net | (280) | - | - | 247 | (34) | 28 | (62) | (221,6) | |
| Minority Interest | 35 | - | - | - | 35 | 32 | 3 | 9,0 | |
| (=) | EBIT | 15.510 | (8.305) | (140) | 1.646 | 8.712 | 6.750 | 1.962 | 29,1 |
| Net Financial result | (1.868) | - | - | 124 | (1.744) | (1.592) | (152) | 9,5 | |
| (=) | EBT | 13.643 | (8.305) | (140) | 1.770 | 6.968 | 5.158 | 1.810 | 35,1 |
| Income tax | (4.063) | 2.824 | 48 | (602) | (1.794) | (1.368) | (426) | 31,2 | |
| (=) | Net income | 9.580 | (5.481) | (92) | 1.168 | 5.174 | 3.790 | 1.384 | 36,5 |
| EPS (R$)* | 14,02 | 7,57 | 5,55 | ||||||
* Balance adjusted for construction revenue and costs
Main non-recurring effects in 2024 were (i) Sabesp Gente VTP accrual for R$ 630 million; (ii) reassessment of legal claims of R$ 471 million; (iii) Write-off of work in progress fixed assets of R$ 164 million; (iv) R$ 111 million of accrual for taxes on unbilled revenue; (v) privatization expenses of R$ 100 million; (vi) slow move and inventory difference accrual of R$ 95 million; and (vii) post-privatization PMI consulting of R$ 40 million.
| 1. |
| 2. |
| 2.1. | ADJUSTED NET REVENUE |
Net revenue from sanitation services considering FAUSP¹ reached R$ 21,726 million (+9% vs. R$ 19,972 million in 2023).
The main factors in the year were:
| · | +7.5% in the consumption price/mix: mainly due to the tariff increase; |
| · | +3.0% in billed volume: increase of 35 thousand active connections; |
| · | (2.0)% FAUSP: initiated in July 2024; |
The R$ 124 million increase (+2.3%) recorded in 4Q24 was mainly due to:
| · | +5.5% in the consumption price/mix; |
| · | +1.2% in billed volume; |
| · | (4.4)% FAUSP; |
2024 Earnings Page 5 |
R$ million
| 2024 | 2023 | Var. (R$) | % | 4Q24 | 4Q23 | Var. (R$) | % | |
| Net revenue from sanitation services | 21.726 | 19.972 | 1.754 | 8,8 | 5.565 | 5.441 | 124 | 2,3 |
| Billed volume (million m³) | 4.316 | 4.190 | 126 | 3,0 | 1.078 | 1.065 | 13 | 1,2 |
| Average rate (R$/m3) | 5,03 | 4,77 | 0,27 | 5,6 | 5,16 | 5,11 | 0,05 | 1,0 |
(1) FAUSP (Support Fund for the Universalization of Sanitation in the São Paulo State) – Amount referring to the difference between the invoice rate vs Sabesp rate.
| 2024 | 2023 | Var. | % | 4Q24 | 4Q23 | Var. | % | |
| Produced water volume (millions m³) | 2.125.136 | 2.042.953 | 82.183 | 4,0 | 537.082 | 526.827 | 10.255 | 1,9 |
| Treated sewage volume (millions m³) | 1.341.937 | 1.187.706 | 154.231 | 13,0 | 329.017 | 308.108 | 20.909 | 6,8 |
| Number of units in thousands¹ | 2024 | 2023 | % |
| Water units | 13.072 | 12.928 | 1,1 |
| Sewage units | 11.762 | 11.581 | 1,6 |
(1) Active and registered units, average by end of period
Unaudited by external auditors
| 2.2. | TARIFF MIX |
An update to the Cadastro Único database in 2H24 led to an increase in the number of residential consumers qualified for the social and vulnerable tariffs. Additionally, the growth in new units in vulnerable regions increases the representation of a lower tariff: An impact of R$ 209 million related to the tariff mix on net sanitation revenue in 2024 vs. 2023.
| 2.3. | ADJUSTED OPEX |
OPEX decreased by R$ 205 million in 2024 (2)%. In 4Q24, the decrease was R$ 221 million (7)%. The main driver for the reduction was the personnel expense line.
R$ million
| 4Q24 adjusted | 4Q23 | Var. (R$) | % | 2024 adjusted | 2023 | Var. (R$) | % | |
| Personnel | 492 | 759 | (266) | (35.1) | 2,682 | 3,121 | (439) | (14.1) |
| General supplies | 143 | 112 | 31 | 28.2 | 412 | 386 | 26 | 6.6 |
| Treatment supplies | 144 | 142 | 2 | 1.5 | 530 | 559 | (28) | (5.1) |
| Services | 678 | 578 | 100 | 17.3 | 2,654 | 2,571 | 83 | 3.2 |
| Electricity | 391 | 367 | 25 | 6.7 | 1,575 | 1,517 | 58 | 3.8 |
| General expenses | 494 | 426 | 69 | 16.2 | 1,896 | 1,594 | 302 | 19.0 |
| Tax expenses | 20 | 26 | (6) | (24.8) | 81 | 90 | (9) | (9.8) |
| Depreciation and amortization | 521 | 749 | (229) | (30.5) | 2,627 | 2,791 | (164) | (5.9) |
| Allowance for doubtful accounts | 155 | 116 | 39 | 33.9 | 558 | 653 | (95) | (14.6) |
| Other revenues and expenses | 57 | 43 | 14 | 32.2 | 34 | (28) | 62 | (221.6) |
| Costs, administrative, and selling expenses | 3,097 | 3,317 | (221) | (6.7) | 13,049 | 13,254 | (205) | (1.5) |
| 2.4. | ADJUSTED PERSONNEL |
There was a decrease of R$ 439 million (14)% in 2024, mainly due to the 11% reduction in the number of employees. The reduction reported in 4Q24 was R$ 266 million (35)%, with staff decreasing by 6% versus the same period in 2023.
| Number of employees | 2024 | 2023 | % |
| Employees at the end of each period | 10,552 | 11,170 | (5.5) |
| Employees - simple average | 10,485 | 11,802 | (11.2) |
2024 Earnings Page 6 |
| 2.5. | ADJUSTED GENERAL EXPENSES |
Increase of R$ 302 million (+19%), totaling R$ 1,896 million in 2024 vs. R$ 1,594 million in 2023, mainly due to higher transfers to Sanitation Municipal Funds for a total of R$ 253 million (pass-through), consistent with the new URAE-1 concession agreement.
R$ million
| MUNICIPAL TRANSFERS | ||||||||
| Municipality | 4Q24 | 4Q23 | Var. (R$) | % | 2024 | 2023 | Var. (R$) | % |
| São Paulo | 189 | 180 | 9 | 5.1 | 731 | 672 | 59 | 8.8 |
| Guarulhos | 9 | 4 | 5 | 129.1 | 35 | 4 | 31 | 771.5 |
| Barueri | 3 | - | 3 | - | 21 | - | 21 | - |
| Osasco | 5 | - | 5 | - | 8 | - | 8 | - |
| Poá | 1 | - | 1 | - | 8 | - | 8 | - |
| Other municipalities | 101 | 47 | 54 | 114.7 | 296 | 169 | 126 | 74.5 |
| Total | 309 | 231 | 77 | 33.4 | 1,099 | 846 | 253 | 29.9 |
| 2.6. | DEPRECIATION AND AMORTIZATION |
Decrease of R$ 164 million (5.9)% in 2024, due to the signing of the new concession agreement with URAE-1, valid thru October 19, 2060, resulting in the reduction of the average amortization rate. In 4Q24, D&A totaled R$ 521 million, down R$ 229 million versus the same period in 2023.
| 3.Investments |
Investments totaled R$ 6,912 million in 2024, up by R$ 628 million or +10% versus 2023. In 4Q24, investments totaled R$ 2,750 million, up 17.1% versus the same period in the previous year.
R$ million
| 4Q24 | 4Q23 | Var. (R$) | % | |
| Water | 966 | 1.043 | (77) | (7,4) |
| Sewage | 1.784 | 1.306 | 478 | 36,6 |
| Total | 2.750 | 2.349 | 401 | 17,1 |
| 2024 | 2023 | Var. (R$) | % | |
| Water | 2.892 | 2.721 | 171 | 6,3 |
| Sewage | 4.020 | 3.563 | 457 | 12,8 |
| Total | 6.912 | 6.284 | 628 | 10,0 |
2024 Earnings Page 7 |
Consolidated Income Statement
| R$ ‘000 | 2024 | 2023 |
| Net Operating Revenue | 36.145.477 | 25.572.056 |
| Operating Costs | (16.603.073) | (16.051.866) |
| Gross Profit | 19.542.404 | 9.520.190 |
| Selling | (917.589) | (984.060) |
| Allowance for doubtful accounts | (557.789) | (652.920) |
| Administrative expenses | (2.311.438) | (1.597.548) |
| Other operating revenue (expenses), net | (280.450) | 27.925 |
| Minority Interest | 35.322 | 32.393 |
| Operating Profit | 15.510.460 | 6.345.980 |
| Financial expenses | (2.701.304) | (2.708.617) |
| Financial revenue | 1.044.151 | 805.905 |
| Exchange gain (loss), net | (210.499) | 310.716 |
| Net Financial Result | (1.867.652) | (1.591.996) |
| Pre-tax Earnings | 13.642.808 | 4.753.984 |
| Current | (1.302.648) | (1.545.671) |
| Deferred | (2.760.597) | 315.218 |
| Income Tax and Social Contribution | (4.063.245) | (1.230.453) |
| Net Income | 9.579.563 | 3.523.531 |
| Earnings per share - R$ | 14,02 | 5,16 |
Consolidated Balance Sheet
R$ ‘000
| ASSETS | 2024 | 2023 |
| Current | 10.608.860 | 7.783.450 |
| Cash and equivalents | 1.682.606 | 838.484 |
| Financial investments | 3.699.694 | 2.426.752 |
| Trade Accounts receivable | 3.894.557 | 3.584.287 |
| Related parties receivable | 319.546 | 261.280 |
| Inventory | 10.818 | 86.008 |
| Restricted cash | 37.715 | 54.944 |
| Taxes | 800.811 | 494.647 |
| Currency Derivatives | 67.440 | - |
| Others | 95.673 | 37.048 |
| Non-Current | 70.356.570 | 53.687.507 |
| Financial investments | 769.057 | - |
| Trade Accounts receivable | 327.798 | 272.436 |
| Related parties receivable | 908.875 | 935.272 |
| Legal Deposits | 139.222 | 130.979 |
| Taxes | - | 98.076 |
| National Water and Sanitation Agency (ANA) | 1.993 | 2.673 |
| Others | 135.227 | 159.017 |
| Investments | 215.803 | 161.863 |
| Land | 46.630 | 46.678 |
| Contract assets | 4.877.667 | 7.393.096 |
| Financial assets | 17.601.626 | - |
| Intangibles | 44.771.124 | 44.012.858 |
| PP&E | 561.548 | 474.559 |
| Total assets | 80.965.430 | 61.470.957 |
2024 Earnings Page 8 |
| LIABILITIES AND EQUITY | 2024 | 2023 |
| Current Liabilities | 11.972.245 | 8.407.842 |
| Trade Accounts Payable | 766.609 | 456.215 |
| Debt | 3.133.850 | 2.616.406 |
| Labor | 1.286.193 | 807.440 |
| Taxes | 591.271 | 511.972 |
| Shareholders Distributions (Dividends and Interest for Own Capital) | 2.275.890 | 837.391 |
| Legal Accruals | 1.546.185 | 1.064.367 |
| Services Accounts Payable | 1.438.507 | 750.732 |
| Public-Private Partnership (PPP) | 452.323 | 487.926 |
| Program Contract Commitments | - | 21.969 |
| Other Trade payables | 194.308 | 218.923 |
| Other | 287.109 | 634.501 |
| Non-Current Liabilities | 32.065.131 | 23.205.739 |
| Debt | 22.124.447 | 16.919.944 |
| Deferred Income Tax | 2.661.891 | - |
| Deferred Sales Tax | 1.117.804 | 164.097 |
| Legal Accruals | 895.495 | 762.065 |
| Pension | 1.931.145 | 2.142.871 |
| Public-Private Partnership (PPP) | 2.853.896 | 2.798.688 |
| Program Contract Commitments | - | 12.047 |
| Performance Contract Payables | 137.441 | 168.298 |
| Other | 343.012 | 237.729 |
| Total Liabilities | 44.037.376 | 31.613.581 |
| Equity | 36.928.054 | 29.857.376 |
| Paid-in Capital | 15.000.000 | 15.000.000 |
| Profit Reserves | 21.647.715 | 14.711.014 |
| OCI | 280.339 | 146.362 |
| Total Equity and Liabilities | 80.965.430 | 61.470.957 |
2024 Earnings Page 9 |
Consolidated Cash Flow Statement
| R$ ‘000 | 2024 | 2023 |
| Operating Free Cash Flow | 7.404.568 | 4.854.352 |
| Pre-tax Earnings | 13.642.808 | 4.753.984 |
| Depreciation and Amortization | 2.676.642 | 2.790.586 |
| PP&E and Intangibles Write-offs | 171.173 | 8.354 |
| Allowance for doubtful accounts | 557.789 | 652.920 |
| Accruals and inflation adjustment | 801.179 | 458.889 |
| Accrued Interest on Debt | 1.655.765 | 1.314.359 |
| Inflation adjustment and FX gains/(losses) Debt | 659.475 | (163.322) |
| Debt inflation adjustment | 34.388 | - |
| Interest and inflation adjustment net gains/(losses) | (237.617) | (79.232) |
| Financial charges to customers | (437.811) | (374.902) |
| Construction Margin | (139.976) | (125.603) |
| Provision for Consent Decrees (TAC) and Voluntary Termination Programs | 354.078 | 356.300 |
| Minority Interest | (35.322) | (32.393) |
| Interest and inflation adjustment (Public-Private Partnerships) | 589.330 | 1.001.078 |
| Municipal Funds Accruals | 309.807 | 195.874 |
| Pension | 161.505 | 238.751 |
| Currency Derivatives | (324.778) | - |
| Financial Asset Bifurcation | (9.151.310) | - |
| Deferred Tax on Financial Asset | 822.482 | - |
| Other adjustments | 108.901 | 21.997 |
| Interest paid | (1.976.694) | (1.936.419) |
| Income tax paid | (1.763.206) | (1.568.611) |
| Changes in Assets | ||
| Trade Accounts Receivable | (442.312) | (835.324) |
| Related parties | (25.429) | (4.553) |
| Inventory | (13.785) | 38.239 |
| Taxes | (306.163) | (251.741) |
| Legal deposits | 50.547 | 72.469 |
| Other | (2.668) | 36.091 |
| Changes in Liabilities | ||
| Trade Accounts Payable | (437.694) | (394.188) |
| Services Payable | 377.968 | (168.384) |
| Labor | 77.973 | 19.377 |
| Taxes | 265.189 | 186.810 |
| Deferred Sales Taxes | 131.225 | 4.374 |
| Accruals | (185.932) | (243.241) |
| Pension | (227.233) | (249.488) |
| Other | (335.726) | (868.699) |
| 2024 | 2023 | |
| Cash flows from Investments | (9.975.642) | (4.905.512) |
| Acquisition of contract and intangible assets | (7.929.946) | (3.991.325) |
| Restricted cash | 17.229 | (17.470) |
| Financial investments - Investment | (6.456.564) | (742.843) |
| Financial investments - Redemption | 5.303.658 | - |
| Financial Investments | (769.057) | - |
| Investments | (40.234) | (6.625) |
| Purchases of tangible assets | (100.728) | (147.249) |
| Cash flows from Financing Activities | 3.415.196 | (977.841) |
| New Debt | 6.870.754 | 2.371.111 |
| Debt repayment | (2.246.263) | (1.771.090) |
| Interest for Own Capital | (928.851) | (823.671) |
| Public-Private Partnership (PPP) | (569.725) | (673.645) |
| Program Contract Commitments | (35.497) | (81.357) |
| Currency Derivatives | 324.778 | 811 |
| Free Cash Flow to Equity | 844.122 | (1.029.001) |
| Cash at Beginning of Period | 838.484 | 1.867.485 |
| Cash at End of Period | 1.682.606 | 838.484 |
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Companhia de Saneamento Básico do Estado de São Paulo - SABESP | ||
| By: | /s/ Daniel Szlak
|
|
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Name: Daniel Szlak
Title: Chief Financial Officer and Investor Relations Officer |
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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.